Alternative Financing

The National Community Investment Fund provides several financial opportunities for potential businesses. They focus solely on the mission-oriented banking industry. The NCIF invests equity in local financial institutions in hopes to driving development in low-income communities. They also co-invest capital and place deposits along with philanthropic investors. The NCIF is also exploring new initiatives such as Small Business Loan Fund and the CDFI Bond Guarantee Program. The U.S. Economic Development Administration assists with grants. The grants are made under the EDA’s programs to help with the economic development strategies in distressed communities.

In order to receive grant funding with the EDA, there is a competitive process. Projects are evaluated to determine they advance global competitiveness, create jobs, leverage public and private resources, and demonstrate readiness and ability to use funds quickly and effectively. Not only that but link to specific and measurable outcomes. The NCIF invests in strong network of different banks and financial institutions. They seek institutions that have effective leadership, show commitment to business in underserved communities, and create an expectation of strong financial and social returns for all stakeholders. They also want institutions to create an expectation of providing liquidity to equity investors within a period of time and are aligned with NCIF’s mission.

On the NCIF website they provide information about their network, annual conference, equity capital, custom analysis, tax credits, deposits, publications and research. You can also search for a mission-oriented bank on their site as well. On EDA’s website they give information about their investment programs, their mission, who is part of the leadership committee and how to contact them. The advantages of using the alternative financing is easier approval, flexible repayment term, promote new business concepts, and affordable rates. The disadvantages to using alternative financing are repayment, high rates, cash and collateral, and impacts on credit rating.

The Advantage of Alternative Financing: Small Business Opportunities - Small Business Financing: Small Business News - The Small Business Fund. (n.d.). Retrieved from http://www.thesmallbusinessfund.com/blog/2012/5/15/the-advantage-of-alternative-financing-small-business-opport.html

Debt Financing - Pros and Cons for Business Owners. (n.d.). Retrieved from http://entrepreneurs.about.com/od/financing/a/debtfinancing.htm

Economic Development Administration. (n.d.). Retrieved from http://www.eda.gov

National Community Investment Fund. (n.d.). Retrieved from http://ncif.org